Tamil Nadu

StateCommission

CC/180/2016

K. Murugesan - Complainant(s)

Versus

M/s. Bank of Baroda, The Regional Manager - Opp.Party(s)

Party in person

26 Apr 2023

ORDER

Date of filing:23.11.2016

IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI

                             BEFORE      Hon’ble Thiru Justice R. SUBBIAH          PRESIDENT

                                                  Thiru R VENKATESAPERUMAL                          MEMBER

 

CC.NO.180/2016

 DATED THIS THE 26^th DAY OF APRIL 2023

K. Murugesan

S/o. T.Kittan

65 A/2, Jamuna Cottage

Upper Vannerpet,  Coonoor (TK)

The Nilgiris – 643 102                                                           ....Complainant

 

                                                  Vs 

 

1.       The Regional Manager

          Bank of Baroda, Regional Office

          Raja Plaza, 3^rd Floor

          1112, Near Lakshmi Mills, Avinashi Road

          Coimbatore - 37

 

2.       The Assistant Director

M/s. Khadi & Village Industries Commission

Mariamman Kovil Street, Avarampalayam

Coimbatore – 641 006                                                 ....Opposite parties

 

Complainant                                                         :   In person

Counsel for 1^st Opposite party                       :   M/s. P.R. Raman

Counsel for 2^nd opposite party                      :   M/s. S. Padma

 

         This complaint coming before us for hearing finally on 9.2.2023 and on hearing the arguments of counsel appearing on bothsides and upon perusing the material records this Commission made the following order:

ORDER

Justice R. SUBBIAH,  PRESIDENT 

1.       This complaint has been filed under Sec.17 of the Consumer Protection Act, 1986, as against the opposite parties for the following reliefs:

          1.       To pay the Revenue loss on own investment @Rs.21,94,182.47/-

          2.       To pay Rs.17,32,432.42/- towards promoter wages

          3.       To pay the security wages @Rs.4,33,664.21/-

          4.       To pay Rs.51,97,297.26/- towards mental agony

          5.       To pay Rs.1,20,920.28/- towards Revenue loss on subsidy and

          6.       To pay Rs.1,50,000/-towards rehabilitation liaison expenses

Totally a sum of Rs.98,28,496.64/-

 

2.       The case of the complainant could be culled out from the pleadings, in brief is as follows:

          The Central Government of India had invited the first generation entrepreneurial aspirants to execute projects for the motivation of self employment generation as well as eradication of unemployment through the Prime Minister Employment Generation Programme (PMEGP).  The complainant who was very much impressed upon the said scheme, took a voluntary retirement from the Government Service for execution of an Agro based MSME project as a priority sector of the Government in a backward rural area.  The said scheme was implemented by the Khadi and Village Industries Commission, and the District Industries Centre, and the fund was provided to this project by the 1^st opposite party.  The then Manager of the 1^st opposite party had directed the complainant to submit some detailed statements vide letter dt.6.12.2012 to release the loan for Rs.6 lakhs.   But the said loan application was rejected by the opposite party after a period of 1 month.  Therefore, the complainant took up the matter to the competent authorities of the said scheme.  After a period of one year, the said Branch Manager had realised his mistake and again agreed to release the loan vide letter dt.23.1.2014.   But again the loan had not been released.    After two years, the present Manager of the 1^st opposite party had asked to present the loan application vide letter dt.31.1.2016. The Credit Manager of the opposite party had imposed a term that he has to achieve 20% projected sales to appraise the performance to release the loan amounting to Rs.8 lakhs.   But he has not considered to release the loan despite fulfilment of his term.  Thereafter, the complainant met the Regional Manager and Branch Manger and he also had a joint meeting with the Regional Manager, General Manager of DIC, the LDM, the District Collector, and the Commissioner of MSME.  But nothing worked out for availing loan, and prioritise project in a vital manner.  Thus alleging negligence on the part of the opposite parties, the complainant filed this complaint, praying for the  relief as stated supra. 

 

3.       The case of the complainant was resisted by the 1^st opposite party as follows:

          The complaint is not maintainable since denial of restructuring and rehabilitation of loan accounts for a commercial purpose is not a consumer complaint.  Therefore, the complaint is to be dismissed in limine.  The complainant availed three term loans from the answering opposite party.  Due to his own mismanagement of the project, he was unable to repay the amount.  Therefore, he cannot allege deficiency in service on the part of the opposite party.  In fact the 1^st opposite party had already taken possession of his property at Nilgiris Registration District, Nilgiris JSROII, Sub District, Udagamandalam Taluk, Kanacombai, Thummatty Village, Ooty Taluk, Old Survey No.57/1, RS No.628 totally measuring 0.25 acres.  The complainant had approached the opposite party on 27.2.2009, requesting for loan of Rs.23.75lakhs (95% of project cost) from the Bank and Rs.1.25 lakhs (5% his own fund as margin) as his own contribution to start a Vegetable Preservation Industry .  The total cost of the project was Rs.25,00,000/-.  The complainant’s project was inaugurated on 15.7.2010.  However, the complainant proceeded to severely mismanage the project and was unable to pay any of his loans.  By March 2011, the complainant had availed three term loans fully i.e. Rs.23.75 lakhs and has to start repayment as per schedule after complete exhaustion of 12 months moratorium period or loan holiday.   On 24.3.2011, the complainant wrote a letter to the Branch Manager, informing him that for employment generation he had executed agri based project under KVIC-PMEGP and has deployed all his extreme efforts and hard work, but unable to operate his project.  The delay in sanction/ approval of loan by the concerned authorities, has resulted in financial constraints.  The complainant also stated that he was not in a position to invest further and doesn’t have hopes for immediate impact on export as well as local sales of his products.  On 6.5.2011 a subsidy of Rs.8.75 lakhs was credited to the complainant’s CCH a/c which had adjusted for dues and the remaining portion of Rs.59770/- credited to his loan account and Rs.16939/- was credited to his another loan account.  Since loan account will be stamped as NPA in the month of May 2011 due to non-repayment of any EMI, by adjusting the subsidy in CCH a/c alongwith excess amount of Rs.76,709/- that has been credited to his overdue and thus saved the complainant’s account temporarily from being stamped as NPA.  On 31.8.2011, the opposite party’s system automatically stamped all the remaining 3 term loan account of the complainant as NPA due to non-repayment, as per RBI norms, and hence the Sarfaesi proceedings had been initiated against the complainant for his non-repayment of his term loan.  Therefore absolutely, there is no deficiency of service on the part of this opposite party.  Thus prayed for dismissal of the complaint. 

          The 1^st opposite party had filed their additional version stating that the 1^st opposite party prepared a detailed viability report on the performance of the project on 3.5.2012 and the same was not found eligible for restructuring.  The bank was not able to consider for restructuring due to the reason that since from two mobile units, it is not possible to achieve the projected sale of 90.14 lakhs within 2 months i.e. 0.51 lakhs of sale upto 10.12.2012 and as on 31.3.2013 Rs.90.65 lakhs.  As per communication dt.10.2.2013 the complainant was informed that he has to repay his loan amount or else the bank will proceed to recover the money through SARFAESI Proceedings, and on 31.8.2011 the 1^st opposite party had issued notice u/s.13(2) of SARFAESI Act 2002.  The complainant had filed a complaint on 11.4.2016 before the General Manager, RPCD, Reserve Bank of India and as advised by the RBI, Chennai vide letter dt.2.12.2016, the proposal for considering the Rehabilitation of M/s. Pasumai Hitech Agro Industry at 1^st opposite party’s Coonoor branch is placed before the committee for taking a suitable decision.  The branch upon verifying the unit, has informed that the project is not technically feasible and economically viable.  The complainant had not repaid one paisa towards settling of his three term loans.  Therefore, no prudent bank would allow further loans and had restricted the sanction of loan especially when public monies are involved.  Thus prayed for dismissal of the complaint. 

 

4.       The version of the 2^nd opposite party in brief is as follows:

          In the present case, the responsibility of the 2^nd opposite party is only to provide margin money subsidy.  The production, sales and marketing of the products are the sole responsibility of the borrower/ beneficiary, since there are lakhs of such beneficiaries assisted throughout the country and providing marketing facility for all the units by the 2^nd opposite party may not be practically possible.  However, if they require marketing assistance, they may approach the sales outlets of Khadi institutions for selling their products with the guidance of 2^nd opposite party.  The 2^nd opposite party by their letter dt.15.2.2012 had intimated the complainant to participate in the international level exhibition and State Level Exhibition for marketing his produced products.  The complainant instead of participating in the exhibitions, had sent a letter dt.27.2.2012 addressed to the District Collector, Nilgiris that eventhough he was informed to participate in International and State Level Exhibitions by the 2^nd opposite party, he could not utilize the opportunity due to paucity and mobilization of funds and requested the bank to sanction a short term cash credit loan.  Besides, the KVIC has facilitated the complainant by giving an opportunity to sell his products through KVIC sale outlet at Cochin.  Accordingly he supplied his products to the Cochin Bhavan, which is a KVIC unit, but there were complaints from the consumers regarding quality, packing, pricing etc.  Thus the 2^nd opposite party had extended various supports to the complainant.  Therefore there is no deficiency in service on their part, thus prayed for dismissal of the complaint. 

 

5.       In support of the contentions proof affidavits are filed by both parties alongwith documents, which are marked as Ex.A1 to A38 on the side of the complainant and Ex.B1 to B8 on the side of the 2^nd opposite party. 

 

6.       We have heard the learned counsel appearing on eitherside. 

 

7.       The main allegation of the complainant is that the complainant by getting impressed upon the PMEGP scheme, had taken voluntary retirement from the Government Service, and approached the 1^st opposite party for sanction of loan.  But the 1^st opposite party delayed the sanction of loan inordinately, which had resulted in loss. 

          Likewise the next allegation is against the 2^nd opposite party, stating that they have not given proper marketing support for the complainant, as per the scheme.  Thus alleging deficiency on the part of the 1^st and 2^nd opposite parties, this complaint is being filed. 

 

8.       But according to the 1^st opposite party, though three term loans were advanced to the complainant, due to his inefficiency he faced loss in his business.  Since he has not repaid the dues, the loan account ought to have been stamped as NPA in the month of May 2011 itself.  But by adjusting the subsidy in CCH a/c alongwith excess amount of Rs.76,709/- that has been credited to his overdue and thus saved the complainant’s account temporarily from being stamped as NPA.  Therefore, there is no deficiency in service on their part. 

          Similarly the 2^nd opposite party had submitted that the production, sales and marketing of the products are the sole responsibility of the borrower/ beneficiary, since there are lakhs of such beneficiaries assisted throughout the country and providing marketing facility for all the units by the 2^nd opposite party may not be practically possible.  However, if they require marketing assistance, they may approach the sales outlets of Khadi institutions for selling their products with the guidance of 2^nd opposite party.

 

9.       Now the primary question that has to be decided is whether the complaint is maintainable before the consumer commissions?

           The case of the complainant is mainly on the allegation that the 1^st opposite party had not sanctioned loan for starting a Vegetable Preservation Industry under PMEGP (Prime Minister Employment Generation Programme).  The loan sought for by the complainant is for a sum of Rs.23.75 lakhs for business purpose.  From the gist of the above it is clear that the complainant wanted to start an industry for generating income.  Nowhere in the complaint it could be seen or understood that the complainant preferred loan for eking out his livelihood on a self employment scheme.   

          In this connection, it is relevant to see the definition for consumer under the Consumer Protection Act 1986.

          Sec.2(1)d of the Consumer Protection Act 1986 reads as follows:

          “Consumer” means any person

1. Buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the persons who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
2. (hires or avails of) any services for consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment and includes any beneficiary of such services other than the person who (hires or avails of) the services for consideration paid or promised, or partly paid or partly promised, or under any system of deferred payment when such services are availed of with the approval of the first mentioned person (but does not include a person who avails of such services for any commercial purpose);

         

          In the complaint on hand, the complainant had neither hired or availed the services of the opposite parties by paying any consideration.  Therefore, he cannot be considered as a consumer.

          Further he availed the services of the opposite parties for commercial purpose i.e., to start up an industry.  Therefore, it is clear that the complainant will not come under the definition stated above, and thus the complaint is not maintainable before this commission. 

 

10.     Further the sanctioning of loan is purely the discretion of the concerned bank.  When the main criteria viz. the credit worthiness as well as the output of his industry is not satisfiable for the loan sanctioning authority, then they cannot be questioned for non-sanctioning of loan.  In the present case, the complainant had obtained other term loans from the 1^st opposite party, which he had not repaid regularly, and in this connection a Sarfaesi proceedings was also pending against the complainant.  Therefore, the 1^st opposite party had raised the doubt about the repaying capacity of the complainant.  Moreover, the 1^st opposite party had stated that based on the detailed viability report on the performance of the project of the complainant, it was found not eligible for restructuring and only after finding that the project was not feasible, the opposite party rejected the loan proposal of the complainant.    Therefore, we cannot find fault in the decision of the 1^st opposite party.  Likewise, the complainant also cannot make an allegation against the 2^nd opposite party,  for not marketing his products.    Therefore, finding no merits in the complaint, it is liable to be dismissed with cost.  However by taking lenient view, we refrain ourselves from doing so.  Accordingly the complaint is dismissed.

 

11.     In the result, the complaint is dismissed.  There is no order as to cost.

 

         

            R  VENKATESAPERUMAL                                            R SUBBIAH     

                       MEMBER                                                              PRESIDENT

 

Exhibits filed on the side of complainant

A1    02.08.2011  Appraisal report

A2    18.08.2011  Export Appraisal report by the Commissioner of Industry & 

                                                                                Commerce

A3    07.12.2011  LDM letter to APEDA, KVIC and Bank

A4    05.01.2012  LDM letter to BM, Vijaya Bank, Coonoor

A5    02.03.2012              -do-

A6    09.04.2012  District Collector direction to KVIC

A7    11.06.2012  LDM letter to AGM, Vijaya Bank, Coimbatore

A8    23.07.2012  RBI direction to Vijaya Bank

A9    15.11.2012 Letter to AGM, Vijaya Bank, Coimbatore

A10  04.12.2012  LDM direction to AGM of Vijaya Bank, Coimbatore

A11  06.12.2012  Vijaya Bank loan offer letter

A12  31.12.2012  Collector direction to KVIC

A13  04.01.2013  GM DIC direction to KVIC

A14  10.02.2013  Vijaya Bank letter regarding rejection of loan proposal

A15  08.05.2013  GM DIC direction to KVIC

A16  17.12.2013   District collector direction to KVIC

A17  07.01.2014  Letter to Vijaya Bank

A18  23.01.2014  Vijaya bank loan offer letter to us

A19  24.01.2014  Letter to Vijaya Bank

A20  26.02.2016  Letter to District Collector by complainant

A21  11.04.2016  Complainant letter to RBI

A22  23.05.2016  RBI-FIDD Chennai direction to the Bank

A23  27.06.2016  Letter to Vijaya Bank

A24  21.07.2016  The bank viable study on our project

A25  22.07.2016  Complainant’s clarification on the bank viable study

A26  28.07.2016  Notice to bank as well as to KVIC

A27                       PMEGP GUIDELINES

A28                       EDP Training certificate

A29  31.01.2016  Letter to Credit Manager of RO VB CBE

A30  10.04.2016              -do-

A31  19.07.2016  Letter from Regional Manager of Vijaya Bank, CBE to RBI

A32  30.07.2016  Complainant’s reply to RBI

A33  25.07.2016  RBI direction to Vijaya Bank RO-Coimbatore

A34  16.11.2016  Complaint on KVIC

A35                       Statement of Investment loss

A36                       Statement of promoter revenue loss

A37                       Statement of Security wages

A38                       Statement of subsidy loss

 

 

Exhibits filed on the side of 2^nd Opposite party:  

B1    27.02.2009  Forwarding letter to Vijaya Bank

B2    15.02.2012  Letter by Assistant Director, KVIC
B3    27.02.2012  Complainant letter to District Collector

B4    14.06.2013  Letter by Assistant Director, KVIC to the complainant

B5    28.06.2013  Reply by Assistant Director, KVIC

B6    2014-15       Ledger copy

B7    2015-16       Ledger copy

B8    2016-17       Ledger copy             

 

 

 

 

  R  VENKATESAPERUMAL                                                    R SUBBIAH     

           MEMBER                                                                    PRESIDENT